Oversubscription rates of the MM Group for Industry and International Trade’s (MTI) shares rose 19.2 times at the end of trading on Thursday, after coverage requests for 343 million shares.
The IPO constitutes 15% of the offering, around 4.5% of the company’s shares (17.8 million shares). Trading on the shares is expected to begin on Tuesday 11 April.
Chairperson and managing director of MTI, Khaled Mahmoud, said that the company is in negotiations to acquire a microfinance company as part of its plan to enter this sector.
He noted that MTI is comparing several companies to acquire. He said that Cairo and Giza are almost saturated in this sector, which prompted MTI to move the game to another pitch, where microfinance is new, giving it a higher potential for further growth.
Mahmoud added that should negotiations fail, MTI will establish a new company, stressing that this will be concluded in the second half of this year.
He said that MTI aims to enhance its commercial activities through establishing a new company in the field of consumer finance.
MTI has announced its unconsolidated financial statement for the fiscal year that ended on 31 December 2016. The company recorded revenues of EGP 5bn and EGP 353m worth of net profits, compared to EGP 4.25bn of revenues and EGP 330m of net profit in 2015.
The company targets a 40% growth in revenues this year to reach EGP 7bn, and EGP 400m in net profit.
Mahmoud said that the company will disburse 50% of dividends realised annually starting next year.
Moreover, MTI is negotiating with new brands to distribute their products in Egypt in the coming period, especially the category of durable goods for middle-income citizens.
Meanwhile, research centres have recommended buying MTI shares. Prime Holding and Mubasher International for Securities estimated the fair value of MTI shares to be between EGP 7.02 and EGP 9.86, which is higher than the IPO fair value of EGP 6.75.
In the middle of last week, Beltone Financial Holding, MTI IPO book runner, announced that MTI has successfully concluded the pricing of its institutional offering, which was oversubscribed by 9.2 times, after recording subscriptions worth EGP 5.5bn.